Government Gives Brazilian Companies a Break and Cuts Interest Rates

Factory in Brazil
Measures announced June 29 by the government of Brazil to stimulate the
economy will favor investment by companies, as well as sales of the
capital goods industry. A reduction of interest rates on loans by the
Brazilian Development Bank (BNDES) was announced.

The Long Term Interest Rate (TJLP), which provides a reference for loans by the BNDES to companies, will drop from 6.5% a year to 6%.

The machinery and equipment industry has also been highly benefited by the packaged announced. The Tax on Industrialized Products (IPI) will be lowered for a total of 70 items manufactured by the segment, among them wind energy generators, industrial freezers and industrial valves.

The measure will remain in effect until the end of the year. There will also be a reduction in the cost of financing for purchase of capital goods. The lines of credit will have a 5.5% decrease in interest rate, to be covered by the government.

Two credit guarantee funds will be established for the purchase of capital goods by medium and small companies. The two funds will be managed by the BNDES and the Bank of Brazil. They will receive 4 billion Brazilian reais (US$ 2 billion) from the Federal Government and will ensure up to 80% of operations. In some cases, according to information supplied by the chairman of the BNDES, Luciano Coutinho, the coverage may reach 100%.

The government has also extended the duration of the lowered IPI on various products, as a means of keeping the domestic market going and of helping Brazilian businesses perform well despite the international crisis. Automobiles, for example, will have three more months of tax exemption, and after that period, the rate will gradually return to normality.

Trucks will remain exempt from the IPI until late December, and the so-called white-line products will remain tax-free until late October. Motorcycles will be exempted from the PIS Cofins tax until September. Fiscal benefits were also created for building materials, wheat, flour and French rolls.

Anba

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil’s Oil Company Petrobras Slightly Reduces Output

Brazil's state-controlled gas and oil multinational Petrobras announced on Friday, December 19, that the ...

Brazilian Software Ready to Conquer Arab Market

A group of six Brazilian companies in the field of software hope to win ...

LETTERS

By I think it would be fair to say that a number of readers ...

Lula and Chí¡vez Put Brazil-Venezuela Relations Back on Track

Brazilian President Luiz Inácio Lula da Silva, assured this Thursday, September 20, that his ...

Brazil Gets Drones from Israel to Fight Crime in Preparation for Olympics

In preparation for the World Cup and the Olympics, that will take place in ...

Congressmen Appeal to Indonesia to Spare Brazilian’s Life

A group of Brazilian senators and House representatives schedule a visit this Wednesday, February ...

Brazil’s Petrobras Exchange Technology with Mexico’s Pemex

The president of Brazilian state-controlled oil company Petrobras, Sérgio Gabrielli, is in Mexico to ...

Brazil Celebrates Antidrug Week Burning 80 Tons of Drugs

Brazilian President Luiz Inácio Lula da Silva will participate, today, in a ceremony at ...

Bolsa de Valores de São Paulo, Brazil, Bovespa

Economics and Politics in Brazil – a Tangled Web

This is the time of year when the financial community looks back on the ...